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Thread: Federal minimum wage rate.

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    Federal minimum wage rate.

    Federal minimum wage rate.
    I'm a proponent of the federal minimum wage be increased12.5% annually until it achieves no less than 125% of February 1968 cost price indexed value. Thereafter the monitored minimum rate should annually (when necessary), be modified to retain that purchasing power.
    Respectfully, Supposn

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    Re: Federal minimum wage rate.

    I'm a proponent of more robots in fast food joints.

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    Re: Federal minimum wage rate.

    Quote Originally Posted by I'm Supposn View Post
    Federal minimum wage rate.
    I'm a proponent of the federal minimum wage be increased12.5% annually until it achieves no less than 125% of February 1968 cost price indexed value. Thereafter the monitored minimum rate should annually (when necessary), be modified to retain that purchasing power.
    Respectfully, Supposn
    give me a number

    what does that equate to right now
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    Re: Federal minimum wage rate.

    Quote Originally Posted by I'm Supposn View Post
    Federal minimum wage rate.
    I'm a proponent of the federal minimum wage be increased12.5% annually until it achieves no less than 125% of February 1968 cost price indexed value. Thereafter the monitored minimum rate should annually (when necessary), be modified to retain that purchasing power.
    Respectfully, Supposn
    I favor indexing the federal MW for CPI inflation (much like is now done with Social Security retirement benefits) but not also using the historic (inflation adjusted) highest MW level (from 1968) as the base level - I favor using the 1939 MW value as that basis which would make the federal MW about $9.15/hour now.

    As an alternative, more in line with your more generous proposal, the hourly federal MW could be set such that its full-time equivalent (based on a 40 hour workweek) is equal to the Federal Poverty Level (FPL) for a three person household for each US state/territory (since variations in the FPL exist by state/territory) - that would result in a MW of $10.25/hour in most states. Of course, that does not preclude any US state/territory from establishing a higher MW value for employers within their jurisdiction.
    Last edited by ttwtt78640; 05-27-19 at 11:49 AM.
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    Re: Federal minimum wage rate.

    The problem with the federal minimum wage debate is we have no good way out of the problem we have created with the minimum wage as it stands now. The current federal minimum wage is set at $7.25 per hour, and has been since 2009. Before then it was set at another fixed amount for a longer period of time.

    The pro to linking federal minimum wage to CPI (consumer price index) is the idea of ensuring even the lowest income quintile participates well in the economy, which should be beneficial to a stable aggregate demand and velocity of money. Small increases over time tend to have less impact to labor supply and demand curves than large jumps as well (still there but far less pronounced.) Moderate rises can work on the assumption of dealing with international labor competition.

    The negative is no fixed labor costs over a duration of time as applied to products and services in that same economy equates to investment unknowns, and that tends to harm expectations of knowing labor rate (usually the highest cost involved) when it comes to supply and demand for a product or service (and expansion within a market.) Also just about every distortion to labor supply and demand ends up with less paid labor for that product or service in the long term. Advancements, automation, producing more with less labor is a normal expectation now. We have seen this with unions competing with international labor, and we have seen this with certain sectors of our market impacted by higher labor rates because of minimum wage increases (namely large chain retail, fast food, and some aspects of lower cost production.) The last negative is cost of living standards is not uniform across the US, $15 per hour (just as an example) has wildly different spending capabilities when comparing say San Francisco, CA to Birmingham, AL to rural Blur Ridge, GA (again all examples.)

    If you linked federal minimum wage to something more like a combination of CPI and productivity you would see it somewhere in the $10 to $13 per hour range.

    If you linked federal minimum wage to CPI alone and considering that just about everything in the basket is purchased then you would see it somewhere in the $21 to $23 per hour range.

    The debate is always the same, what is compromised to get to those points and stay there based on these factors? (Economists tend to vary a good bit on impact to those very people who work at or just over minimum wage.)
    "Democracy without respect for individual rights sucks. It's just ganging up against the weird kid, and I'm always the weird kid." - Penn Jillette.

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    Re: Federal minimum wage rate.

    Quote Originally Posted by I'm Supposn View Post
    Federal minimum wage rate.
    I'm a proponent of the federal minimum wage be increased12.5% annually until it achieves no less than 125% of February 1968 cost price indexed value. Thereafter the monitored minimum rate should annually (when necessary), be modified to retain that purchasing power.
    Respectfully, Supposn
    I am for the federal government perhaps establishing a low minimum wage to prevent unethical employers from engaging in phony apprentice programs etc. and thereby utilizing what amounts to slave labor. It is appropriate at the federal level because often employers are working in more than one state and it would be difficult for the states to police that.

    Otherwise let the free market set what labor is worth. Those worth more than minimum wage will find ways to earn more than minimum wage. And the hard core unemployed will have infinitely more opportunity to get a foot in the door and be able to develop a work ethic, acquire experience, earn references and ability to earn more.

    Few employers are going to hire the person who won't be able to produce sufficiently to cover his/her own wages, benefits, and additional costs to the employer for longer than a brief training period. So the hard core unemployed are pretty much shut out of the wage market in a high minimum wage situation.

    Few people who actually work for their paycheck stay at minimum wage for long.
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    Re: Federal minimum wage rate.

    Quote Originally Posted by OrphanSlug View Post
    The problem with the federal minimum wage debate is we have no good way out of the problem we have created with the minimum wage as it stands now. The current federal minimum wage is set at $7.25 per hour, and has been since 2009. Before then it was set at another fixed amount for a longer period of time.

    The pro to linking federal minimum wage to CPI (consumer price index) is the idea of ensuring even the lowest income quintile participates well in the economy, which should be beneficial to a stable aggregate demand and velocity of money. Small increases over time tend to have less impact to labor supply and demand curves than large jumps as well (still there but far less pronounced.) Moderate rises can work on the assumption of dealing with international labor competition.

    The negative is no fixed labor costs over a duration of time as applied to products and services in that same economy equates to investment unknowns, and that tends to harm expectations of knowing labor rate (usually the highest cost involved) when it comes to supply and demand for a product or service (and expansion within a market.) Also just about every distortion to labor supply and demand ends up with less paid labor for that product or service in the long term. Advancements, automation, producing more with less labor is a normal expectation now. We have seen this with unions competing with international labor, and we have seen this with certain sectors of our market impacted by higher labor rates because of minimum wage increases (namely large chain retail, fast food, and some aspects of lower cost production.) The last negative is cost of living standards is not uniform across the US, $15 per hour (just as an example) has wildly different spending capabilities when comparing say San Francisco, CA to Birmingham, AL to rural Blur Ridge, GA (again all examples.)

    If you linked federal minimum wage to something more like a combination of CPI and productivity you would see it somewhere in the $10 to $13 per hour range.

    If you linked federal minimum wage to CPI alone and considering that just about everything in the basket is purchased then you would see it somewhere in the $21 to $23 per hour range.

    The debate is always the same, what is compromised to get to those points and stay there based on these factors? (Economists tend to vary a good bit on impact to those very people who work at or just over minimum wage.)
    Your point about regional variations in the cost of living is valid, yet those regions have boundaries which may present a problem. Employers near those regional boundaries must pay the higher wage or face the probability of a labor shortage due to those seeking employment nearby where they are guaranteed a higher starting wage.
    “The reasonable man adapts himself to the world: the unreasonable one persists to adapt the world to himself.
    Therefore all progress depends on the unreasonable man.” ― George Bernard Shaw, Man and Superman

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    Re: Federal minimum wage rate.

    Quote Originally Posted by AlbqOwl View Post
    I am for the federal government perhaps establishing a low minimum wage to prevent unethical employers from engaging in phony apprentice programs etc. and thereby utilizing what amounts to slave labor. It is appropriate at the federal level because often employers are working in more than one state and it would be difficult for the states to police that.
    There are better, more direct ways to eliminate those loopholes. If you don't like unpaid/low wage apprentice programs, just legislate rules that eliminate the problem.

    Quote Originally Posted by AlbqOwl View Post
    Otherwise let the free market set what labor is worth. Those worth more than minimum wage will find ways to earn more than minimum wage. And the hard core unemployed will have infinitely more opportunity to get a foot in the door and be able to develop a work ethic, acquire experience, earn references and ability to earn more.
    Labor is never compensated "what they are worth." Labor is compensated according to the demand for labor. The price of corn isn't "what it's worth," the price of corn varies with the supply and demand for corn. If there is lots of excess corn, then prices will go down. And if there is lots of excess labor, then, in a free market, wages will fall, too. Just like healthcare, wages are one of those things that needs some government intervention.

    Quote Originally Posted by AlbqOwl View Post
    Few employers are going to hire the person who won't be able to produce sufficiently to cover his/her own wages, benefits, and additional costs to the employer for longer than a brief training period. So the hard core unemployed are pretty much shut out of the wage market in a high minimum wage situation.
    What an employee produces for the company merely sets the ceiling of his possible compensation, not the floor.
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    Re: Federal minimum wage rate.

    Quote Originally Posted by OrphanSlug View Post
    The problem with the federal minimum wage debate is we have no good way out of the problem we have created with the minimum wage as it stands now. The current federal minimum wage is set at $7.25 per hour, and has been since 2009. Before then it was set at another fixed amount for a longer period of time.

    The pro to linking federal minimum wage to CPI (consumer price index) is the idea of ensuring even the lowest income quintile participates well in the economy, which should be beneficial to a stable aggregate demand and velocity of money. Small increases over time tend to have less impact to labor supply and demand curves than large jumps as well (still there but far less pronounced.) Moderate rises can work on the assumption of dealing with international labor competition.

    The negative is no fixed labor costs over a duration of time as applied to products and services in that same economy equates to investment unknowns, and that tends to harm expectations of knowing labor rate (usually the highest cost involved) when it comes to supply and demand for a product or service (and expansion within a market.) Also just about every distortion to labor supply and demand ends up with less paid labor for that product or service in the long term. Advancements, automation, producing more with less labor is a normal expectation now. We have seen this with unions competing with international labor, and we have seen this with certain sectors of our market impacted by higher labor rates because of minimum wage increases (namely large chain retail, fast food, and some aspects of lower cost production.) The last negative is cost of living standards is not uniform across the US, $15 per hour (just as an example) has wildly different spending capabilities when comparing say San Francisco, CA to Birmingham, AL to rural Blur Ridge, GA (again all examples.)

    If you linked federal minimum wage to something more like a combination of CPI and productivity you would see it somewhere in the $10 to $13 per hour range.

    If you linked federal minimum wage to CPI alone and considering that just about everything in the basket is purchased then you would see it somewhere in the $21 to $23 per hour range.

    The debate is always the same, what is compromised to get to those points and stay there based on these factors? (Economists tend to vary a good bit on impact to those very people who work at or just over minimum wage.)
    IMO linking minimum wage to anything other than what labor is worth to an employer is going to do more harm than good. Make the minimum so high that the employer is unable to produce a reasonable profit and/or it just isn't worth the considerable risks, problem solving, and effort to run a business, and he will close down and go to work for wages himself. Why would I want all the truly significant headaches running my own business if I can earn almost as much or more without those headaches working for somebody else?

    If enough small businesses do that you start flooding the market with laid off people who will work for pretty much whatever they can get. This eliminates a lot of entry level positions or non essential positions and therefore opportunity for the hardcore unemployed. And any time there is a buyer's market for labor, it depresses wages and opportunity for a whole bunch of people to aspire to earn more.
    --Nobody deserves to be automatically judged guilty just because somebody accuses them. The accusation itself could be the crime.
    --"I think the best way of doing good to the poor, is not making them easy in poverty, but leading or driving them out of it." --Benjamin Franklin 1776

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    Re: Federal minimum wage rate.

    Quote Originally Posted by AlbqOwl View Post
    IMO linking minimum wage to anything other than what labor is worth to an employer is going to do more harm than good. Make the minimum so high that the employer is unable to produce a reasonable profit and/or it just isn't worth the considerable risks, problem solving, and effort to run a business, and he will close down and go to work for wages himself. Why would I want all the truly significant headaches running my own business if I can earn almost as much or more without those headaches working for somebody else?

    If enough small businesses do that you start flooding the market with laid off people who will work for pretty much whatever they can get. This eliminates a lot of entry level positions or non essential positions and therefore opportunity for the hardcore unemployed. And any time there is a buyer's market for labor, it dilutes wages and opportunity for a whole bunch of people to aspire to earn more.
    How is a low minimum wage going to help a buyer's market for labor? Who is helped if the clearing price for labor is, say, $3/hour?

    If you want a free market solution to low wages, it's not going to happen on its own. Automation and cheap foreign labor will keep labor costs down. What is necessary is a true tight labor market at all levels of compensation, and a shift from the vast income inequality we have been living with for the past 40 years.

    To me, the best solution is a federal job guarantee, coupled with universal healthcare and a beefed-up pension/SS system. The public sector is capable of supplying the needed jobs. And a healthy social safety net will obviate the need for much higher wages.

    The whole system we have now is in place specifically to keep wages low and profits high. It's not going to fix itself because it's not designed to fix itself, it's designed to keep the rich rich.
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